IRS updates requirements for 30% Solar Tax Credit

In response to the President’s Executive Order dated July 9, 2025, the Internal Revenue Service released new guidance on August 15th tightening the rules to qualify for the Solar Investment Tax Credit (ITC). The new rules change the requirements for establishing “beginning of construction”, but only for projects larger than 1.5MW (AC). Projects below this size can still qualify for safe harboring by spending 5% of the project’s contracted amount. Projects larger than 1.5MW now can only qualify by satisfying the stricter Physical Work Test. The upshot for most rooftop solar projects is that they still have until July 4th 2026 to capture the 30% ITC, but then it will be gone unless they can complete construction before the end of 2027. Confused yet? Contact one of our experts to guide you safely to the finish line.